NORTH GEORGIA LAWYERS REPRESENTING BUSINESSES IN CHAPTER 11 BANKRUPTCY
When a business is no longer operating profitably, Perrotta & Cahn assists clients in Chapter 11 bankruptcy for corporations and businesses. We have offices in Cartersville, Calhoun, Dalton and Dallas, making us convenient to offices and workplaces throughout northwest Georgia. Learn more about Chapter 11 bankruptcy here.
Chapter 11 Procedure
Chapter 11 bankruptcy, commonly referred to as “business reorganization,” is commenced by the filing of a voluntary petition by the debtor, or the filing of an involuntary petition by the debtor’s creditors. Similar to the other chapters of the U.S. Bankruptcy Code, an automatic stay goes into effect after filing for Chapter 11, which stops creditors from trying to collect on debts. During this breathing spell, the debtor can and will commence negotiations with its creditors in an effort to make debts more manageable and propose a reorganization plan.
The debtor in Chapter 11 reorganization is referred to as the “debtor-in-possession.” The debtor-in-possession generally has many creditors, which makes it difficult for the debtor to attempt contacts and negotiations with these numerous creditors. Accordingly, the bankruptcy trustee in major cases appoints creditor committees that are usually comprised of the debtor’s seven largest unsecured creditors. It is each committee’s duty is to negotiate with the debtor-in-possession.
Corporations in a Chapter 11 bankruptcy exist in a form separate from their owners (the stockholders). This means that the personal assets of the corporation’s stockholders are not at risk, unlike a company that is owned by an individual and that is not incorporated in any form.
Chapter 11 versus Chapter 13
A Chapter 11 bankruptcy may be filed instead of a Chapter 13 bankruptcy for several reasons. For one, only individuals may file under Chapter 13. On the other hand, the Chapter 11 debtor is not necessarily an individual, but instead may be a corporation. Also, an individual debtor with debt that exceeds the statutory limit (cap) placed on a Chapter 13 bankruptcy may only be eligible for reorganization under Chapter 11 bankruptcy.
In some cases, the creation of a satisfactory financial reorganization plan can be a very complex and intensive undertaking. Our attorneys have significant experience helping business owners and businesses successfully navigate Chapter 11 proceedings. When bankruptcy is done right, businesses and entrepreneurs can look forward to better organization and more manageable operations during and after bankruptcy.
Contact an Experienced Business Bankruptcy Lawyer in North Georgia
If your business is facing bankruptcy, do not hesitate to contact Perrotta & Cahn for a free consultation with one of our experienced attorneys. The more proactive you are about handling debt, the better your chances of protecting business assets and taking full advantage of protections provided under bankruptcy law.